IF or When The rest of the industry will match the GOM

Gentlemen
Long time reader, and not much of a contributor. The action in the GOM seems to be large amount of the discussion on the forum. I have read several posts about the ebbs an flows of the oil field, and would like to pose a question to my fellow Mariners. When do you think the rest of the industry will catch up to the oil field? Will day rates ever match the GOM? As stated in a previous post, some limited masters(west coast, C.captain post/ costal transportation ) are making what QMEDS do in the GOM. From an outsider point of view the boat companies seem to be almost in a bidding war at times, were other parts of the industry seem to do business as usual. When you think day rates/ or salaries will increase? Will AMO ever break into the oil patch (I don’t think so, and I know that this have been covered, but fuck it). What would make you swap from the oil field to another part of the industry. Is your day rate everything? What about job security? ( I would give credit to prior post, but I can’t find it) When do you make your move? Every Academy kid that just graduated, and everyone that has ever worked on a workboat would jump at the chance to work for the major players in the GOM. Is it just a Gravy train? and if it is, what would make you get off the train? and when?

http://www.professionalmariner.com/April-2013/Gulf-operators-increasingly-recruiting-from-the-maritime-academies/

Read the fourth paragraph and since that was written weve exercised more options so factor that in.I have no idea how long this cycle will last so I’m just enjoying it. I’m not blowing my money on big trucks, bigger houses, hookers or blow. I’m saving my money because having been through a few of these boom and bust cycles I know what happens when it goes the other way. I have no plan on getting off the gravy train unless I hit the powerball tomorrow night. I don’t understand myself why the tug companies don’t adjust their payscales. Experienced people are hard to come by now. I’m figuring at some point mud boat companies will start a full on assault and raid the tug companies of seasoned people. You can lock down all the academy grads in the world but it will take many years before even the best ones (KP grads included :))will be ready for a Master or Chief position. Once they actively start pursuing tug people the $ will have to be comparative. Look how Chouest and Harvey are positioning themselves for the end of the year. They will be on par or ahead of Hornbeck and others who will have to bump again at some point. Everyone has boats being delivered around that time and past that. With all the drillships and DP rigs coming out they will have to fight them as well. Academy kids hired today will have their full DP certificates by then and will leave for the big money. I’m dizzy just talking about the vicious cycle in front of us. Eventually it will come to an end things will be so bad we might have to take pay cuts. As you’ve already read its the ebb and flow. You’re about as secure as how much money you stashed away during the party.

You might as well give up on that Powerball pipe dream.

Because I bought the winning ticket today.

My uninformed guess is that the “irrational exuberance” of the day rates in the GOM will someday self correct when the rigs are built out and the manning pool is saturated… And the price of the oil and gas gets closer to the cost of production…

I can’t see that kind of income for the rest of the industry any time soon… Lots of academy kids going brown water from the start now.

I guess we are splitting it then buddy because my son picked these #'s out and he is firm on them being a winner.

[QUOTE=Fraqrat;109715]http://www.professionalmariner.com/April-2013/Gulf-operators-increasingly-recruiting-from-the-maritime-academies/

Read the fourth paragraph and since that was written weve exercised more options so factor that in.I have no idea how long this cycle will last so I’m just enjoying it. I’m not blowing my money on big trucks, bigger houses, hookers or blow. I’m saving my money because having been through a few of these boom and bust cycles I know what happens when it goes the other way. I have no plan on getting off the gravy train unless I hit the powerball tomorrow night. I don’t understand myself why the tug companies don’t adjust their payscales. Experienced people are hard to come by now. I’m figuring at some point mud boat companies will start a full on assault and raid the tug companies of seasoned people. You can lock down all the academy grads in the world but it will take many years before even the best ones (KP grads included :))will be ready for a Master or Chief position. Once they actively start pursuing tug people the $ will have to be comparative. Look how Chouest and Harvey are positioning themselves for the end of the year. They will be on par or ahead of Hornbeck and others who will have to bump again at some point. Everyone has boats being delivered around that time and past that. With all the drillships and DP rigs coming out they will have to fight them as well. Academy kids hired today will have their full DP certificates by then and will leave for the big money. I’m dizzy just talking about the vicious cycle in front of us. Eventually it will come to an end things will be so bad we might have to take pay cuts. As you’ve already read its the ebb and flow. You’re about as secure as how much money you stashed away during the party.[/QUOTE]
The ebb and flow has been going on for a LONG time. The oil boom in the GOM in the last 10 years or so has changed things and with the deeper water drilling requiring larger vessels the bar got raised again. Things will level out pretty soon but keep in mind that all it takes is a hiccup in the world economy to shut down the oil business, along with what little ocean trade the US shipping fleet has. One would be wise to upgrade as far as one can. I can remember working on a ship where everyone in the engine room from the chief to the third held a chief license while the oilers held 1st, we were all happy to have what we had too!

Good post and good questions. I tried to start another thread about high pay vs. job satisfaction which was kind of along these lines. It just kind of fizzled out. The wages in the GOM right now are truly amazing. But that is only part of the picture. There are a lot of things you have to look at.

There is an amazing amount of paperwork involved, even compared to other industry sectors (except maybe moving oil in the downstream side). The abundance of policies takes away the autonomy in how you carry out your job. Tons of BS paperwork truly makes the job less enjoyable.

Some of the jobs are interesting and truly dynamic, a majority involve having the DP system hold the vessel in one place for hours/days/months on end and occasionally moving using a joystick or set points. It sounds appealing at first, especially if you have done a lot of manual ship handling in your career, but it gets boring real unless the DP system takes a dump, which isn’t really good and just requires more paperwork to about 2-5 different parties. Then on the OSV side it typically involves working out of/standing by in s-hole Port Fourchon. Which isn’t exactly great place to be. It is interesting for a little bit. Then the novelty wears off and reality sets in.

If you are flying in most of the big companies pay a travel allowance that will cover the majority of your travel expenses, but it is still a pain in the ass to have to deal with your own travel arrangements. (Not complaining just stating my opinion. i knew the arrangement when I hired on) Especially when crew change is late/ early by a day or more.

Then there is the training. Company required training, customer requires training and industry required training. And it seems to be getting worse. It is different for every customer so far. If you work for customer X, everybody on the boat has to be rigging certified. Company Y accepts this HUET but company Z your boat is going on charter with doesn’t. (More days not at home doing training, at least getting some sort of day rate at the good boat companies) Drilling companies pay for everything, no comparison to a boat company.

Then obviously you have to consider the cyclic nature of the oil and gas industry. It is not necessarily the most stable, but it looks real good in the near future. And a last note, at a lot of the bigger companies you can feel just like a number and most of the time probably are. Takes a little getting used to if you are a part of a small company/division coming to that.

So, when do you make a jump? The million dollar question. I made a jump primarily for much better benefits (amazing how you view things once kids are in the picture), but the pay was certainly a consideration. I was making about $25 a day less as Master on a unlimited tonnage hopper dredge (second highest paying co. in the US dredging industry) than I do as Mate on a OSV (without DP cert). The differential between the Master positions on the dredge and OSV would be more like $175-200 a day (with full DP). Differential on a construction type vessel (Harder to come by, although Hornbeck and Harvey are building some Jones Act ones) requiring unlimited officers would be more like a $400-500 a day pay differential at the Master level and still significant on down.

So the other million dollar question. Is it worth it? Is it worth the extra BS for those kind of numbers? I have seen two trains of thought in that regard.

  1. You work offshore for 6-8 months or more of the year away from your family and it is called work for a reason- make as much as you can and try and find satisfaction in what you do or job satisfaction be damned. The doctor/lawyer money getting thrown around right now can sure buy a lot of happiness.
  2. You work offshore for 6-8 months or more of the year away from your family and you should enjoy what you do as long as you make enough to live comfortably. Money can’t buy you happiness.

Disclaimer: This is the personal view of a dredge turned OSV deck officer. Your situation and mileage may vary.

Many want my job but what I long for is a small, fast containership on an interesting run. Why? Because drillships are complicated beasts with lots of moving parts and a ton of people while containership a are simple and elegant. I’d trade my job for a Matson run to Hawaii anyday if the pay were better and I didn’t have to wait in line at the union hall.

[QUOTE=cmjeff;109723]Many want my job but what I long for is a small, fast containership on an interesting run. Why? Because drillships are complicated beasts with lots of moving parts and a ton of people while containership a are simple and elegant. I’d trade my job for a Matson run to Hawaii anyday if the pay were better and I didn’t have to wait in line at the union hall.[/QUOTE]
It is all relative. More pay for more parts or less pay for less parts? If you are paid by the part drillship guys are underpaid. Container ship chief with one engine or drillship chief with six plus a drillfloor, cranes, etc., etc.? Quality of life must factor in too. Are you really doing what you want to do or just in it for the money and bragging rights that only a few people outside the industry understand? It is a question we all wrestle with.

Very interesting, Its amazing that some parts of our industry are high paying, while others parts are very underpaid, an undervalued, not to take anything away from any mariner. After the oil crunch in the 80’s how many mariners continued, and advanced their careers in the oil field? How many made the switch and still managed to thrive? Its all about bubbles

Love what i do, the guys I work with, and the equipment is well maintained and comfortable. Close to home, company doesn’t mess with us too hard and with the raise that’s in the works i don’t feel the differential between here and the GOM makes sense for me. Travel days gone, probably double the paperwork, larger crew to manage, all that BS I don’t have to deal with for what ultimately working equal time is MAYBE 10k a year less, plus the non-tangible perks and the financial ones. Joe boss gives me about %10 of my annual pay towards my 401k fully vested, and pays for a lot of other little things.

I’d only consider leaving for down south if I had a few years paid guaranteed. I was ready to do it and started making some moves in the fall but came to my senses about how good a racket I would be giving up in leaving.

Pay rates outside the gulf won’t climb until the day rate for the particular type of vessel climbs proportionally. What is it 40k a day for an OSV and maybe 5k a day for a tug?

Ive been at one of the best tug and barge company’s for quite a while, newer equipment and they really dont mess with us to much, boat dependent. But even with what the pay is, we are still short people, lets all face facts, no one wants to be here, the maritime grad retention rate here is maybe 20-25%, they get a few years in, actual work weeds them out, and they go shoreside. For hawsepipe guys, like myself, the cost for a license and training was a huge investment, with the long term goal in mind. I see a mass exodus brewing, for those qualified to go to the patch. For 200-300 more a day, guys really start questioning things, and the tug companys are starting to really see the big picture. Just my 2 cents.

I cant see a levelling out throughout the industry. It comes down to responsibility, a master/oim of a drillship is responsible for a $700 million vessel, an operation that can cost up to $600k per day. That alone will make the drilling mariners higher paid. Plus the operation being conducted by these dp rigs is as well a very expensive one. You could argue that a new lng tanker or cruise ship could rival these numbers, especially a cruise ship with the human factor, and I don’t undertsand why they are not as highly paid. Maybe because it is mostly foreign mariners and the drilling has the gom and american aspect which will keep salaries higher.

[QUOTE=PDCMATE;110620]I cant see a levelling out throughout the industry. It comes down to responsibility, a master/oim of a drillship is responsible for a $700 million vessel, an operation that can cost up to $600k per day. That alone will make the drilling mariners higher paid. Plus the operation being conducted by these dp rigs is as well a very expensive one. You could argue that a new lng tanker or cruise ship could rival these numbers, especially a cruise ship with the human factor, and I don’t undertsand why they are not as highly paid. Maybe because it is mostly foreign mariners and the drilling has the gom and american aspect which will keep salaries higher.[/QUOTE]

I largely agree but I don’t think the GOM or North Americans are driving wages, it is simply supply and demand. Outside the USA , where there is a lot of drilling, there isn’t a lot of demand or even a desire in some cases for US mariners but the wages remain high. One must keep in mind that supply and demand does NOT mean just having a license, rather it means commensurate experience. This is something a lot of folks I know who have tried to break into the drilling end don’t understand but they would find it equally as difficult to get on a Panamax box if they tried.

Yes, but some drilling companies still pay based on your passport. For instance, Ocean Rig, will pay different wages for the same position and different passports. I know some us, uk and Canadian guys who will not get a call back from them, because their pay demands would be higher than some of the other nationalities they employ. I hate to say it, but because oil and gas is dominated by us personnel, we have caused these wages to increase at a significant rate. Its not a bad thing and helps everyone, especially those companies who pay the same for whatever passport you have.

[QUOTE=PDCMATE;110640]Yes, but some drilling companies still pay based on your passport. For instance, Ocean Rig, will pay different wages for the same position and different passports. I know some us, uk and Canadian guys who will not get a call back from them, because their pay demands would be higher than some of the other nationalities they employ. I hate to say it, but because oil and gas is dominated by us personnel, we have caused these wages to increase at a significant rate. Its not a bad thing and helps everyone, especially those companies who pay the same for whatever passport you have.[/QUOTE]

Interesting, I know some guys from the UK and the USA who went to work for OR within the last 6 months, no problem, all were highly qualified though, 10+ years experience in management level positions. I am exposed to many areas of the maritime industry now that I am semi-employed and if one has commensurate experience of 5+ years gaining employment is not a problem. As has always been the case though the entry jobs are harder to get and at times I wonder if some of the HR people are looking at tea leaves to make decisions for entry applicants.

It wasn’t impossible to get hired at OR, just was contractual differences for some people. They definitely need people for their 4 newbuilds. Ask your friends if it is still the case with the different pay for passports. I would be interested to see what they say. Also, I know they don’t cover your taxes in the country you work, I wonder if that is still the case too?

[QUOTE=PDCMATE;110646]It wasn’t impossible to get hired at OR, just was contractual differences for some people. They definitely need people for their 4 newbuilds. Ask your friends if it is still the case with the different pay for passports. I would be interested to see what they say. Also, I know they don’t cover your taxes in the country you work, I wonder if that is still the case too?[/QUOTE]

I will and will PM you with any info I find.

With the tax thing, you pay 12% and they cover the rest (source OIM with OR)